Category: Companies / January 18, 2013 10:53 AM EST
Sharp Corp has halted production of 9.7 inch screens for Apple Inc's iPad two, as the pioneer of tablet computers tries to clear unsold stocks of its flagship computer product.
"Sources told us today that Sharp has more or less halted production of it's iPad 9.7 inch screens at its Kameyama plant in central Japan, so the suggestion there is that Apple's sales of iPads are not as good as may have been anticipated. And what it looks is though as you're seeing is suffering from cannibalisation of itself in that consumers are shifting to the iPad mini rather buy the iPad," explained Reuters Senior Correspondent Tim Kelly who was close to the story.
Any indication that iPad sales are struggling would add to the concern that Apple’s appeal is waning, after earlier media reports suggested it was slashing orders for iPhone 5 screens and other components from its Asian suppliers.
Apple is losing ground to Samsung, as well as emerging rivals.
"It's bad news for everybody. If Apple is selling less, then the reaction is going to be very quick as Apple is very big, is a very high profile company, any change to its fortunes causes rapid reaction from investors. For Sharp, it's more a question of survival. Apple is a big customer for them. Their small LCD business is its strongest part of its business so far, and it's maybe at the core of what it sees as its revival," Kelly explained.
For its iPad, in addition to Sharp, Apple also buys screens from LG Display, its biggest supplier, and Samsung Electronics. Both LG Display and Samsung Display declined to comment.
Apple CEO, Tim Cook, who is credited with building Apple's Asian supply chain, has overseen several gadget launches, including the iPhone 5, the latest iPad models and the iPad mini during his first year.
Cook is under pressure to deliver the kind of product innovations that wowed consumers during Steve Jobs' tenure to keep his company's profit growth stellar.